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On Friday, U.S. Bankruptcy Judge Sean Lane shut the door on American Airlines’ plans to stop paying premiums for health and life insurance for current retirees. On Monday, the airline put this on its internal Jetnet daily newsletter:

On Friday, U.S. Bankruptcy Judge Sean H. Lane rejected American’s request to be allowed to modify the medical and life insurance benefits of most legacy American employees who retired before November 1, 2012. While the ruling does permit the company to modify or terminate the plans of some non-union and management retirees now, a trial will be necessary to determine whether other retirees’ benefits can be changed. We’ll share additional information in the coming weeks on next steps for any of the plans.

The wording about a possible trial may have led some to wonder if American has decided to take the matter to trial. However, an American spokesman assures me, no such decision has been made, one way or the other. “We’re reviewing the judge’s ruling and determining next steps.”

American Airlines and US Airways planes at parked at Washington's Reagan National Airport. (AP Photo/Susan Walsh)

American Airlines Inc. and US Airways Group Inc. reportedly plan to seek an extension to their proposed $11 billion merger.

American’s parent AMR Corp. and US Airways yesterday told AMR creditors they plan to ask their boards to extend the merger termination date of Dec. 17, The Wall Street Journal reported today, citing “two people familiar with the matter.” The new potential date wasn’t available.

Update at 12:10 p.m.: In a joint statement, American and US Airways said they’re working closely with AMR’s creditors committee on “all key matters,” including the anti-trust lawsuit filed by the U.S. Department of Justice.

Update at 12:10 p.m.: “We remain confident in our case and are eager to get to court in order to make the case for the new American Airlines and deliver the benefits of this merger to all of our stakeholders, including AMR’s creditors, as soon as possible,” the airlines said in the statement.

The two airlines agreed to merge in February. The merger is a key part of American and AMR’s plan to emerge from Chapter 11 bankruptcy, which they filed in November 2011. A U.S. Bankruptcy Court hearing on confirming American’s reorganization plan is scheduled for tomorrow in New York.

AMR creditors, both airlines’ boards and unions, US Airways shareholders and European Union regulators support American’s reorganization plan, but it still needs clearance from the Justice Department and U.S. Bankruptcy Court.

The DOJ on Aug. 13 filed a lawsuit, arguing the merger is anti-competitive and would hurt consumers. That suit is slated to go to trial Nov. 25.

In addition, two San Francisco lawyers, Joseph Alioto and David Cook, have filed a separate, class-action antitrust lawsuit, alleging similar issues with the merger as the DOJ suit.

American and US Airways yesterday in court filings responding to the DOJ suit staunchly defended their proposed merger and criticized the suit. The airlines said the deal does not violate antitrust laws and that the government’s challenge showed a lack of knowledge about their industry.

U.S. Bankruptcy Judge Sean Lane today is weighing approval of the proposed $11 billion merger between American Airlines and US Airways at a hearing in New York.

American Airlines CEO Tom Horton last week spoke at a Senate Judiciary Committee hearing in Washington, D.C., about his company's proposed merger with US Airways. (Bloomberg/Andrew Harrer)

Lane could rule today or issue a written ruling later. In addition, US Airways shareholders and government regulators must approve the proposed merger.

The unsecured creditors committee, pilots unions at both airlines and an ad hoc bondholder group have voiced support of the merger.

However, the U.S. Trustee in the case has objected, saying the $20 million compensation package for American’s departing chief executive Tom Horton does not comply with federal bankruptcy law. He would become chairman of the merged company for a limited time and would receive a severance of cash and stock when the merger closes.

“The debtors are permitting the CEO and the insiders of this bankrupt company to hold this deal hostage to their self-interested self-dealing,” according to U.S. Trustee Tracy Hope Davis’ filing. U.S. Trustees are part of the U.S. Department of Justice.

Also today, Lane is considering objections and responses to the merger agreement and Horton’s compensation and a request from American’ parent AMR Corp. to extend the time frame to file its Chapter 11 reorganization plan from April 15 to May 29.

Once the reorganization plan is filed with the bankruptcy court, creditors have 60 days to object before the judge can approve American’s exit from bankruptcy.

Both airlines have said they expect the merger to close in September, creating the world’s largest carrier with 900 routes and 100,000 employees. The headquarters for the combined company would be in American’s home town of Fort Worth.